Paris, February 16th, 2012 – The European Court of Justice rendered another decision in defence of freedoms online. In the SABAM vs. Netlog case, it declares that forcing a hosting service to monitor and filter online content violates EU law. This is a crucial and timely ruling, just when initiatives such as ACTA and the revision of the IPRED directive aim to generalise private and automatic online censorship to enforce an outdated copyright regime.

In this important ruling, the EU Court of Justice follows a similar reasoning to that of theSABAM vs. Scarlet decision1, and concludes that forcing a hosting service to screen all of its users' communications in order to block potentially copyright-infringing content violates EU law and fundamental rights, in particular freedom of expression and privacy. The Court referred in particular to the 2000 Online Services Directive (“eCommerce directive”) and the Charter of Fundamental Rights2.

As several policy proposals such as ACTA or the upcoming IPRED revision aim at preventing the sharing of culture through a private party enforcement, this decision comes right on time. It clearly states that pushing private companies to monitor and police their networks and services to prevent potential copyright infringements is not compatible with the democratic values of the European Union.

“This ruling should sound as a call for EU policy makers to stop pushing for privatized censorship schemes under the guise of ‘cooperation’ between Internet actors and the entertainment industry. We now need to break away from repression, which is bound to undermine our freedoms online and the open Internet, and engage in a profound reform of our broken copyright regime. We must invent a copyright that, instead of censoring the Net, will foster access to culture and sharing while fairly funding creation.”, said Jérémie Zimmermann, spokesperson for the advocacy group La Quadrature du Net.

The ECJ ruling the SABAM vs. Netlog case follows a lawsuit introduced in 2009: Belgian copyright collecting society SABAM sued the Belgium-based social networking site Netlog and demanded that Netlog, which qualifies as a hosting service, be forced to install a system to prevent copyright infringements carried on by its more than 2 million Belgian members. The Court of First Instance of Brussels referred the case to the European Court of Justice, asking whether such measure was compatible with EU law3.

2. See the ruling: http://curia.europa.eu/juris/document/document.jsf?docid=119512&mode=req...
See, below, the most important excerpts :
34 (...) The Court has already ruled that that prohibition applies in particular to national measures which would require an intermediary provider, such as a hosting service provider, to actively monitor all the data of each of its customers in order to prevent any future infringement of intellectual-property rights. Furthermore, such a general monitoring obligation would be incompatible with Article 3 of Directive 2004/48, which states that the measures referred to by the directive must be fair and proportionate and must not be excessively costly (see Scarlet Extended, paragraph 36).

36 (...) It is common ground that implementation of that filtering system would require: (i) first, that the hosting service provider identify, within all of the files stored on its servers by all its service users, the files which are likely to contain works in respect of which holders of intellectual-property rights claim to hold rights; (ii) next, that it determine which of those files are being stored and made available to the public unlawfully; and (iii) lastly, that it prevent files that it considers to be unlawful from being made available.

37 Preventive monitoring of this kind would thus require active observation of files stored by users with the hosting service provider and would involve almost all of the information thus stored and all of the service users of that provider (see, by analogy, Scarlet Extended, paragraph 39).

45 (...) In the main proceedings, the injunction requiring the installation of the contested filtering system involves monitoring all or most of the information stored by the hosting service provider concerned, in the interests of those rightholders. Moreover, that monitoring has no limitation in time, is directed at all future infringements and is intended to protect not only existing works, but also works that have not yet been created at the time when the system is introduced.

48 (...) Moreover, the effects of that injunction would not be limited to the hosting service provider, as the contested filtering system may also infringe the fundamental rights of that hosting service provider’s service users, namely their right to protection of their personal data and their freedom to receive or impart information, which are rights safeguarded by Articles 8 and 11 of the Charter respectively.

49 Indeed, the injunction requiring installation of the contested filtering system would involve the identification, systematic analysis and processing of information connected with the profiles created on the social network by its users. The information connected with those profiles is protected personal data because, in principle, it allows those users to be identified (see, by analogy, Scarlet Extended, paragraph 51).

50 Moreover, that injunction could potentially undermine freedom of information, since that system might not distinguish adequately between unlawful content and lawful content, with the result that its introduction could lead to the blocking of lawful communications. Indeed, it is not contested that the reply to the question whether a transmission is lawful also depends on the application of statutory exceptions to copyright which vary from one Member State to another. In addition, in some Member States certain works fall within the public domain or may be posted online free of charge by the authors concerned (see, by analogy, Scarlet Extended, paragraph 52)

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3. The full preliminary question was the following: “Is it in conformity with the EU E-Copyright Directive 2001/29, the EU IP Enforcement Directive 2004/48, the EU Data Protection Directive 95/46, the EU E-Commerce Directive 2000/31, the EU Privacy in Electronic Communications Directive 2002/58 and Articles 8 and 10 of the European Convention of Human Rights that EU Member States allow a national court to issue a cease-and-desist order against internet intermediaries the services of which are used by third parties to commit copyright infringement, so that a hosting provider is obliged to install a system for its entire clientèle, which filters all incoming and saved information in order to identify electronic data which contain copyright-protected work and in order to block the further exchange of these files?”